I have the impression that the launches of the two systems, Nintendo 3DS and Wii U, were consecutive failures. Nintendo 3DS seemed to recover after the hardware markdown and the availability of a wide selection of third-party software. As for Wii U, the situation does not look so good. I have the same concern for the launch of the new NX. What measures are you taking to avoid the same mistakes? Also, please comment on your collaborative relationships with third parties from whom you currently lack support.

A 3

Iwata:

The situation for Nintendo 3DS and Wii U is in line with what you mentioned. For Wii U in particular, it cannot be said that it had a successful launch. As for Nintendo 3DS, in Japan there was a temporary slowdown but we managed to make a recovery by offering a number of initiatives collectively. On the other hand, Wii U has not been able to recover at this point in time. Because of this, the size of the installed base compared to the Nintendo DS or Wii eras appears not to be as solid and this is reflected in the company’s profitability. But taking a look back, it was not the case that Nintendo DS sold with huge momentum from the beginning. When it first started to lose momentum, we offered a number of titles from a new genre, such as “nintendogs” or “Brain Age: Train Your Brain in Minutes a Day,” and these titles were widely accepted even by those who had never played video games in the past. This sequence of events led to a very large business. The platform business can sometimes be referred to as a “momentum business.” Thus, it is ideal to have a jump start and drive momentum. Looking back at some of Nintendo’s past platforms, this ideal launch has been achieved 100 percent by perhaps only Wii. Even the Nintendo DS launch had areas in which we could have done better. I cannot disagree with your indication that Wii U is experiencing the most unfavorable situation.

Since the word “NX” has been mentioned, please let me elaborate. When Nintendo announced the collaboration with DeNA on March 17 of this year, I mentioned that Nintendo is currently developing a new dedicated video game system codenamed “NX.” The reason I mentioned this was, at that time, there were more than a certain number of people that thought that Nintendo would give up on the dedicated game system business and concentrate on smart device application development, or that Nintendo should take that path. In addition, such tone could be seen frequently through the media. I felt it was necessary to communicate that Nintendo is not pessimistic about the future of the dedicated game system business but rather more and more eager to continue it. On the other hand, details on the new platform essentially should come later. This is because the entertainment business has an aspect where there is value in surprising consumers. It is not convincing enough to the consumer if we describe how the magic works before actually showing it to them and then expecting them to be surprised or delighted. Having the element of surprise or doing the unexpected is the premise for introducing new ideas and having them welcomed with surprise. That is why I have been repeatedly saying that the next news on NX will not be announced during 2015 but will be announced in 2016. Nevertheless, since NX has news value, when I am interviewed on various occasions, I am asked about it almost every time. I will not share details on NX today but with regard to the launch of Nintendo 3DS and Wii U not necessarily having progressed well and not acquiring sufficient support from software publishers, we intend to offer NX through a Nintendo-like solution. Thank you for understanding that we are making various considerations and preparations in order to avoid what happened with the previous generations.

On a different note, I believe the standard for software publishers in selecting what hardware to provide their games for is the installed base after all. The larger the installed base or the more it is believed that the installed base will largely expand, there is an aspect that more software publishers are likely to join in. On the other hand, Nintendo is collaborating with various software publishers. At E3, which was held in the U.S. and is the largest trade show in the video game industry, we received many proposals for joint initiatives. In addition, Japanese software publishers have close relationships with our licensing department on a regular basis. As for collaborations with software publishers or their games, please consider that there are various ongoing projects below the surface.

I have the impression that the launches of the two systems, Nintendo 3DS and Wii U, were consecutive failures. Nintendo 3DS seemed to recover after the hardware markdown and the availability of a wide selection of third-party software. As for Wii U, the situation does not look so good. I have the same concern for the launch of the new NX. What measures are you taking to avoid the same mistakes? Also, please comment on your collaborative relationships with third parties from whom you currently lack support.

A 3

Iwata:

The situation for Nintendo 3DS and Wii U is in line with what you mentioned. For Wii U in particular, it cannot be said that it had a successful launch. As for Nintendo 3DS, in Japan there was a temporary slowdown but we managed to make a recovery by offering a number of initiatives collectively. On the other hand, Wii U has not been able to recover at this point in time. Because of this, the size of the installed base compared to the Nintendo DS or Wii eras appears not to be as solid and this is reflected in the company’s profitability. But taking a look back, it was not the case that Nintendo DS sold with huge momentum from the beginning. When it first started to lose momentum, we offered a number of titles from a new genre, such as “nintendogs” or “Brain Age: Train Your Brain in Minutes a Day,” and these titles were widely accepted even by those who had never played video games in the past. This sequence of events led to a very large business. The platform business can sometimes be referred to as a “momentum business.” Thus, it is ideal to have a jump start and drive momentum. Looking back at some of Nintendo’s past platforms, this ideal launch has been achieved 100 percent by perhaps only Wii. Even the Nintendo DS launch had areas in which we could have done better. I cannot disagree with your indication that Wii U is experiencing the most unfavorable situation.

Since the word “NX” has been mentioned, please let me elaborate. When Nintendo announced the collaboration with DeNA on March 17 of this year, I mentioned that Nintendo is currently developing a new dedicated video game system codenamed “NX.” The reason I mentioned this was, at that time, there were more than a certain number of people that thought that Nintendo would give up on the dedicated game system business and concentrate on smart device application development, or that Nintendo should take that path. In addition, such tone could be seen frequently through the media. I felt it was necessary to communicate that Nintendo is not pessimistic about the future of the dedicated game system business but rather more and more eager to continue it. On the other hand, details on the new platform essentially should come later. This is because the entertainment business has an aspect where there is value in surprising consumers. It is not convincing enough to the consumer if we describe how the magic works before actually showing it to them and then expecting them to be surprised or delighted. Having the element of surprise or doing the unexpected is the premise for introducing new ideas and having them welcomed with surprise. That is why I have been repeatedly saying that the next news on NX will not be announced during 2015 but will be announced in 2016. Nevertheless, since NX has news value, when I am interviewed on various occasions, I am asked about it almost every time. I will not share details on NX today but with regard to the launch of Nintendo 3DS and Wii U not necessarily having progressed well and not acquiring sufficient support from software publishers, we intend to offer NX through a Nintendo-like solution. Thank you for understanding that we are making various considerations and preparations in order to avoid what happened with the previous generations.

On a different note, I believe the standard for software publishers in selecting what hardware to provide their games for is the installed base after all. The larger the installed base or the more it is believed that the installed base will largely expand, there is an aspect that more software publishers are likely to join in. On the other hand, Nintendo is collaborating with various software publishers. At E3, which was held in the U.S. and is the largest trade show in the video game industry, we received many proposals for joint initiatives. In addition, Japanese software publishers have close relationships with our licensing department on a regular basis. As for collaborations with software publishers or their games, please consider that there are various ongoing projects below the surface.”